Former CU Branch Manager Sentenced to 30 Months in Federal Prison

A former branch manager, who refused to accept responsibility for embezzling nearly $400,000 from the credit union’s vault and claimed she accidentally burned the cash in her backyard fire pit, was sentenced on Friday to two and a half years in federal prison, according to the U.S. Attorney’s Office in Pittsburgh.

Patty Lynn Mavrakis, 65, of Belle Vernon, Pa., was originally charged with embezzlement, wire fraud and the use of fire to commit a federal felony in September 2021. She was the branch manager for the $98.5 million Valley 1st Community Federal Credit Union in Monessen, Pa. In September 2016, she falsely claimed that an alarm wire caught on fire and consumed $340,200 in cash that was in a box. She then wired a false insurance claim to CUMIS, which the company processed and paid.

In exchange for pleading guilty to wire fraud, federal prosecutors dropped the other two charges, according to a plea agreement Mavrakis signed in June. She also acknowledged her responsibility for the offense of using fire to commit a federal felony, which was considered in calculating her prison term, the plea deal showed.

However, court documents revealed there were sharp disagreements regarding the prison sentence. Federal prosecutors argued for a prison sentence of 46 months to 57 months, in part, because she did not take responsibility for the embezzlement.

But Mavrakis’ lawyer said that sentence recommended by prosecutors was far greater than necessary to achieve the goals of sentencing because the former branch manager has no prior history of criminal conduct, and she accepted responsibility by pleading guilty to wire fraud and acknowledged her responsibility of using fire to commit a federal felony. Nevertheless, her lawyer indicated in court documents that Mavrakis did not accept responsibility for the embezzlement charge because it was specifically excluded from the plea agreement.

But prosecutors argued Mavrakis has refused to accept responsibility for embezzlement, despite overwhelming evidence that she committed wire fraud and used fire to commit a federal felony to cover up her theft.

On Labor Day in 2016, when the branch was closed for business, Mavrakis went to the credit union and opened its safe.

Knowing the location of the surveillance cameras, she attempted to surreptitiously move an empty banker’s box to the floor in front of the open safe. A surveillance camera, however, caught – for a split second – a glimpse of the box as Mavrakis moved it in front of the safe. She then crouched in front of the open safe, filling the box with cash.

Later, the video showed the former branch manager leaving the credit union with the box, along with five other boxes. She delivered the five other boxes to the main office of the credit union. However, the sixth box, which was filled with cash, stayed with her.

“In other words, she stole it,” prosecutors wrote in their sentencing memo to U.S. District Court Judge Marilyn J. Horan. “On the following day, the video shows (Mavrakis arriving) at the credit union before any other employee and lit a fire in the safe in an attempt to cover her theft. She subsequently alleged that a faulty wire destroyed the cash in the safe. Not only does the surveillance video show her theft, but a significant amount of additional evidence corroborates the video and provides a motive for the theft.”

During the sentencing hearing, federal prosecutors presented evidence that from 2014-2017, Mavrakis gambled millions of the dollars at the Meadows Casino in Washington, Pa. What’s more, within three weeks after stealing the credit union’s money on Labor Day, she gambled $37,632. To put that into perspective, in 2016 her wages at the credit union were $31,398, prosecutors said. To carry her gambling losses out even further, from the date of the fire, Sept. 6, 2016, and through the end of 2017, Mavrakis lost $153,853 at the casino and her husband lost an additional $5,670, for a total loss of $159,523.

“This is particularly noteworthy, as the credit union terminated Mavrakis’ employment on Oct. 4, 2016, and had extremely limited income throughout the rest of 2016 and all of 2017,” prosecutors said.

In a sentencing memo to Judge Horan, Mavrakis’ lawyer did not address the former credit union employee’s gambling problem and explained her version of events as they unfolded during and after Labor Day 2016:

Mavrakis went to the credit union to retrieve documents and placed them in six boxes. She then sorted through them to determine which documents were to be destroyed or discarded. The documents included duplicate transaction copies, her own notes/log of checks submitted by her branch and checkbooks delivered to the branch that members did not wish to utilize. Mavrakis claimed to do this four to five times a year.

“Although she began shredding the discardable documents, the shredder at her branch office was too small and extremely inefficient. So, although it may not have met with institutional protocol, Ms. Mavrakis typically took these documents home and burned them,” according to Mavrakis’ sentencing memo. “She took the documents out of the safe and placed them in boxes. Then, she took the money out of the safe, put it in a box and wiped the dust out of the safe.”

When she got home, she grabbed a box thought to contain the discardable documents and took it to her backyard firepit and lit the box.

“She started poking the box with a stick. When portions of currency bills started to float out of the fire she realized, to her great horror, that she had mistakenly just started burning money, not discardable documents,” according to Mavrakis’ sentencing memo. “She put the fire out as soon as possible with water cans kept near the firepit for safety. However, a significant amount of the money was lost before she was able to do so. The rest was damaged significantly by fire, smoke and water. Ms. Mavrakis was mortified. While not knowing how things would ultimately unfold, she admits to putting the money back in the safe the next day and acting like this great accident occurred in the safe room.”

But prosecutors didn’t buy her story.

“After years of making false statements about the events on Sept. 5 and 6, 2016, this is the story that [Mavrakis] now maintains is the truth. On its face, this story is absolutely incredible, and there is no evidence to support it, except for [Mavrakis’] word, which has proven to be untrustworthy. Moreover, the story has numerous significant flaws and should not be believed,” prosecutors said.

They also noted that the box was burned so thoroughly that not even a single bill survived, despite the over 10,000 individual bills missing from the credit union.

During the sentencing hearing, Judge Horan also ordered Mavrakis to pay restitution of $399,230 and a special assessment of $100. A fine was waived.